Silver rises in price amid supply deficit

A number of analysts forecast a rise in silver to $30 per ounce in 2023, the highest level over the past ten years. The rise in prices will be supported by an imbalance of demand and supply, with the first one exceeding the latter. 

Managing director at Australia’s ABC Bullion, Janie Simpson, noted that silver prices have a tendency to increase during periods of high inflation. At that time, their growth was about 20%. In this regard, the precious metal may indeed rise to $30 per ounce in 2023, although it is likely to be a level of significant resistance.

Randy Smallwood, president of Canada’s Wheaton Precious Metals, believes that silver is unlikely to exceed the level of $30. However, according to him, the precious metal’s prices will certainly remain above $20 per ounce.

Many analysts consider the rise in silver prices this year as the result of the metal's low reserves and its ability to outperform gold in periods of inflation. The Silver Institute data demonstrate that global production of the precious metal was about 843 million ounces in 2022. In 2016, it was about 900 million ounces. Thus, there is a certain downward trend in silver reserves.

Silver is often a byproduct of mining other metals, therefore, it is quite difficult to increase its production. But in addition to reduced production, the prices might be affected by higher industrial demand for silver.